Lis Pendence, doctrine of

AIR 2013 SC 2389

Para 23: It would also be worth to discuss some of the relevant laws in order to appreciate the case on hand. Section 52 of the Transfer of Property Act speaks about the doctrine of lis pendens. Section 52 reads as under:

"52. Transfer of property pending suit relating thereto. - During the [pendency] in any Court having authority [within the limits of India excluding the State of Jammu and Kashmir] or established beyond such limits] by [the Central Government] [***] of [any] suit or proceedings which is not collusive and in which any right to immovable property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party thereto under any decree or order which may be made therein, except under the authority of the Court and on such terms as it may impose.

[Explanation - For the purposes of this section, the pendency of a suit or proceeding shall be deemed to commence from the date of the presentation of the plaint or the institution of the proceeding in a Court of competent jurisdiction, and to continue until the suit or proceeding has been disposed of by a final decree or order and complete satisfaction or discharge of such decree or order has been obtained, or has become unobtainable by reason of the expiration of any period of limitation prescribed for the execution thereof by any law for the time being in force."

Para 24: It is well settled that the doctrine of lis pendens is a doctrine based on the ground that it is necessary for the administration of justice that the decision of a court in a suit should be binding not only on the litigating parties but on those who derive title pendente lite. The provision of this Section does not indeed annul the conveyance or the transfer otherwise, but to render it subservient to the rights of the parties to a litigation. Discussing the principles of lis pendens, the Privy Council in the case of GouriDuttMaharaj v. Sukur Mohammed &Ors. AIR 1948 PC 147, observed as under:

"The broad purpose of Section 52 is to maintain the status quo unaffected by the act of any party to the litigation pending its determination. The applicability of the section cannot depend on matters of proof or the strength or weakness of the case on one side or the other in bona fide proceedings. To apply any such test is to misconceive the object of the enactment and in the view of the Board, the learned Subordinate Judge was in error in this respect in laying stress, as he did, on the fact that the agreement of 8.6.1932, had not been registered."

Para 25: In the case of KedarNathLal&Anr. v. Ganesh Ram &Ors. AIR 1970 SC 1717, this Court referred the earlier decision (1967 (2) SCR 18) : (AIR 1967 SC 1440) and observed:

"The purchaser pendente lite under this doctrine is bound by the result of the litigation on the principle that since the result must bind the party to it so it must bind the person driving his right, title and interest from or through him. This principle is well illustrated in Radhamadhub Holder v. Monohar (1887) 151.A. 97 where the facts were almost similar to those in the instant case. It is true that Section 52 strictly speaking does not apply to involuntary alienations such as court sales but it is well-established that the principle of lis pendens applies to such alienations. (See Nilkant v. Suresh Chandra (1885) 12 IA171 and MotiLal v. Karrab-ul-Din (1897) 24 I.A.170."

Para 26: The aforesaid Section 52 of the Transfer of Property Act again came up for consideration before this Court in the case of Rajender Singh &Ors. v. Santa Singh &Ors. AIR 1973 SC 2537 and Their Lordship with approval of the principles laid down in 1973 (1) SCR 139 : (AIR 1973 SC 569) reiterated:

"The doctrine of lis pendens was intended to strike at attempts by parties to a litigation to circumvent the jurisdiction of a court, in which a dispute on rights or interests in immovable property is pending, by private dealings which may remove the subject-matter of litigation from the ambit of the court's power to decide a pending dispute of frustrate its decree. Alienees acquiring any immovable property during a litigation over it are held to be bound, by an application of the doctrine, by the decree passed in the suit even though they may not have been impleaded in it. The whole object of the doctrine of lis pendens is to subject parties to the litigation as well as others, who seek to acquire rights in immovable property which are the subject-matter of a litigation, to the power and jurisdiction of the Court so as to prevent the object of a pending action from being defeated."

Para 27: In the light of the settled principles of law on the doctrine of lis pendens, we have to examine the provisions of Order 1, Rule 10 of the Code of Civil Procedure. Order 1, Rule 10 which empowers the Court to add any person as party at any stage of the proceedings if the person whose presence before the court is necessary or proper for effective adjudication of the issue involved in the suit. Order 1, Rule 10 reads as under :

"10. Suit in name of wrong plaintiff.-

(1) Where a suit has been instituted in the name of the wrong person as plaintiff or where it is doubtful whether it has been instituted in the name of the right plaintiff, the Court may at any stage of the suit, if satisfied that the suit has been instituted through a bona fide mistake, and that it is necessary for the determination of the real matter in dispute so to do, order any other person to be substituted or added as plaintiff upon such terms a the Court thinks just.

(2) Court may strike out or add parties.-The Court may at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the Court to be just, order that the name of any party improperly joined, whether as plaintiff or defendant, be struck out, and that the name of any person who ought to have been joined, whether as plaintiff or defendant, or whose presence before the Court may be necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the suit, be added.

(3) No person shall be added as a plaintiff suing without a next friend or as the next friend of a plaintiff under any disability without his consent.

(4) Where defendant added, plaint to be amended.-Where a defendant is added, the plaint shall, unless the Court otherwise directs, be amended in such manner as may be necessary, and amended copies of the summons and of the plaint shall be served on the new defendant and, if the Court thinks fit, on the original defendant.

(5) Subject to the provisions of the Indian Limitation Act, 1877 (15 of 1877),section 22, the proceedings as against any person added as defendant shall be deemed to have begun only on the service of the summons."

Para 28: From the bare reading of the aforesaid provision, it is manifest that sub-rule (2) of Rule 10 gives a wider discretion to the Court to meet every case or defect of a party and to proceed with a person who is a either necessary party or a proper party whose presence in the Court is essential for effective determination of the issues involved in the suit.

Para 29: Considering the aforesaid provisions, this Court in the case of Ramesh HirachandKundanmal v. Municipal Corporation of Greater Bombay &Ors. 1992 (2) SCC 524 : (1992 AIR SCW 846) held as under:

"It cannot be said that the main object of the rule is to prevent multiplicity of actions though it may incidentally have that effect. But that appears to be a desirable consequence of the rule rather than its main objectives. The person to be joined must be one whose presence is necessary as a party. What makes a person a necessary party is not merely that he has relevant evidence to give on some of the questions involved; that would only make him a necessary witness. It is not merely that he has an interest in the correct solution of some questions involved and has thought of relevant arguments to advance. The only reason which make it necessary to make a person a party to an action is that he should be bound by the result of the action and the question to be settled, therefore, must be a question in the action which cannot be effectually and completely settled unless he is a party. The line has been drawn on a wider construction of the rule between the direct interest or the legal interest and commercial interest. It is, therefore, necessary that the person must be directly or legally interested in the action in the answer, i.e., he can say that the litigation may lead to a result which will affect him legally that is by curtailing his legal rights. It is difficult to say that the rule contemplates joining as a defendant whose only object is to prosecute his own cause of action. Similar provision was considered in Anion v. Raphael Tuck & Sons Ltd. (1956) 1 All E.R. 273, wherein after quoting the observations of Wynn-Parry, J. in DollfusMieg et Compagnie S.A. v. Bank of England (1950) 2 All ER 605 (611), that the true test lies not so much in an analysis of what are the constituents of the applicants' rights, but rather in what would be the result on the subject-matter of the action if those rights could be established, Devlin J. has stated:

The test is 'May the order for which the plaintiff is asking directly affect the intervener in the enjoyment of his legal rights."

Para 30: At this juncture, we would also like to refer Section 19 of the Specific Relief Act which reads as under:

"19. Relief against parties and persons claiming under them by subsequent title. Except as otherwise provided by this Chapter, specific performance of a contract may be enforced against

(a) either party thereto;

(b) any other person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of the original contract;

(c) any person claiming under a title which, though prior to the contract and known to the plaintiff, might have been displaced by the defendant;

(d) when a company has entered into a contract and subsequently becomes amalgamated with another company, the new company which arises out of the amalgamation;

(e) when the promoters of a company have, before its incorporation, entered into a contract for the purpose of the company and such contract is warranted by the terms of the incorporation, the company;

Provided that the company has accepted the.contract and communicated such acceptance to the other party to the contract."

Para 31: From the bare reading of the aforesaid provision, it is manifest that a contract for specific performance may be enforced against the parties to the contract and the persons mentioned in the said section. Clause (b) of Section 19 makes it very clear that a suit for specific performance cannot be enforced against a person who is a transferee from the vendor for valuable consideration and without notice of the original contract which is sought to be enforced in the suit.

Para 32: In the light of the aforesaid discussion both on facts and law, we shall now examine some of the relevant facts in order to come to right conclusion.

Para 33: As noticed above, even before the institution of suit for specific performance when the plaintiff came to know about the activities of the Sawhneys to deal with the property, a public notice was published at the instance of the plaintiff in a newspaper "The Hindustan Times" dated 12.02.1990 (Delhi Edn.) informing the public in general about the agreement with the plaintiffs; In response to the said notice the sister concern of the appellant M/s. Living Media India Limited served a legal notice on the defendants- Sawhneys' dated 24.06.1990 whereby he has referred the 'agreement to sell' entered into between the plaintiffs and the defendants- Sawhneys'.

Para 34: Even after the institution of the suit, the counsel who appeared for the defendants- Sawhneys' gave an undertaking not to transfer and alienate the suit property. Notwithstanding the order passed by the Court regarding the undertaking given on behalf of the defendants- Sawhneys', and having full notice and knowledge of all these facts, the sister concern of the appellant namely Living Media India Ltd. entered into series of transaction and finally the appellant M/s. Thomson Press got a sale deed executed in their favour by Sawhneys' in respect of suit property.

Para 35: Taking into consideration all these facts, we have no hesitation in holding that the appellant entered into a clandestine transaction with the defendants-Sawhneys' and got the property transferred in their favour. Hence the appellant - M/s. Thomson Press cannot be held to be a bona fide purchaser, without notice.

Para 36: On perusal of the two orders passed by the single judge and the Division Bench of the High Court, it reveals that the High Court has not gone into the question as to whether if a person who purchases the suit property in violation of the order of injunction, and having sufficient notice and knowledge of the Agreement, need to be added as party for passing an effective decree in the suit.

Para 37: As discussed above, a decree for specific performance of a contract may be enforced against a person claiming under the plaintiff, and title acquired subsequent to the contract. There is no dispute that such transfer made in favour of the subsequent purchaser is subject to the rider provided under Section 52 of the Transfer of Property Act and the restrain order passed by the Court.

Para 38: The aforesaid question was considered by the Calcutta High Court in the case of Kafiladdin and others v. Samiraddin and others, AIR 1931 Calcutta 67 where Lordship referred the English Law on this point and quoted one of the passage of the Book authored by Dart, on "Vendors and Purchasers" Edn.8, Vol.2, which reads as under :-

"Equity will enforce" specific performance of the contract for sale against the vendor himself and against all persons claiming under him by a title arising subsequently to the contract except purchaser for valuable consideration who have paid their money and taken a conveyance without notice to the original contract."

Discussing elaborately, the Court finally observed:-

"The statement of the law is exactly what is meant by the first two clauses of S.27, Specific Relief Act. It is not necessary to refer to the English cases in which decrees have been passed against both the contracting party and the subsequent purchaser. It is enough to mention some of them : Daniels v. Davison(2), Potters v. Sanders (3), Lightfoot v. Heron(4). The question did not pertinently arise in any reported case in India; but decrees in case of specific performance of contract have been passed in several cases in different forms. In ChunderKanta Roy v. Krishna Sundar Roy (5) the decree passed against the contracting party only was upheld. So it was in Kannan v. Krishan(6). In HimmatlalMotilal v. Basudeb(7) the decree passed against the contracting defendant and the subsequent purchaser was adopted. In Gangaram v. Laxman(9) the suit was by the subsequent purchaser and the decree was that he should convey the property to the person holding the prior agreement to sale. It would appear that the procedure adopted in passing decrees in such cases is not uniform. But it is proper that English procedure supported by the Specific Relief Act should be adopted. The apparent reasoning is that unless both the contracting party and the subsequent purchaser join in the conveyance it is possible that subsequently difficulties may arise with regard to the plaintiff's title."

Para 39: The Supreme Court referred the aforementioned decision of the Calcutta High Court in the case of Durga Prasad and another v. Deep Chand and others, AIR 1954 SC 75, and finally held:-

"In our opinion, the proper form of decree is to direct specific performance of the contract between the vendor and the plaintiff and direct the subsequent transferee to join in the conveyance so as to pass on the title which resides in him to the plaintiff. He does not join in any special convenants made between plaintiff and his vendor; all he does is to pass on his title to the plaintiff. This was the course followed by the Calcutta High Court in - Kafiladdin v. Samiraddin, AIR 1931 Cal 67 (C) and appears to be the English practice. See Fry on Specific Performance, 6th Ed. Page 90, paragraph 207; also - 'Potter v. Sanders', (1846) 67 ER 1057. We direct accordingly."

Para 40: Again in the case of Ramesh Chandra v. ChunilLal, AIR 1971 SC 1238, this Court referred their earlier decision and observed:

"It is common ground that the plot in dispute has been transferred by the respondents and therefore the proper form of the decree would be the same as indicated at page 369 in LalaDurga Prasad v. Lala Deep Chand, 1954 SCR 360 : (AIR 1954 SC 75) viz., "to direct specific performance of the contract between the vendor and the plaintiff and direct the subsequent transferee to join in the conveyance so as to pass on the title which resides in him to the plaintiff. He does not join in any special covenants made between the plaintiff and his vendor; all he does is to pass on his title to the plaintiff. We order accordingly. The decree of the courts below is hereby set aside and the appeal is allowed with costs in this court and the High Court."

Para 41: This Court again in the case of Dwarka Prasad Singh and others v. Harikant Prasad Singh and others AIR 1973 SC 655 subscribed it's earlier view and held that in a suit for specific performance against a person with notice of a prior agreement of sale is a necessary party.

Para 42: Having regard to the law discussed herein above and in the facts and circumstances of the case and also for the ends of justice the appellant is to be added as party-defendant in the suit. The appeal is, accordingly, allowed and the impugned orders passed by the High Court are set aside.

Para 43: Before parting with the order, it is clarified that the appellant after impledment as party-defendant shall be permitted to take all such defences which are available to the vendor Sawhneys' as the appellant derived title, if any, from the vendor on the basis of purchase of the suit property subsequent to the agreement with the plaintiff and during the pendency of the suit.

T.S.THAKUR, J.

Para 44: I have had the advantage of going through the order proposed by my Esteemed Brother M.Y. Eqbal, J. While I entirely agree with the conclusion that the appellant ought to be added as a party-defendant to the suit, I wish to add a few lines of my own.

Para 45: There are three distinct conclusions which have been drawn by Eqbal, J. in the judgment proposed by his Lordship. The first and foremost is that the appellant was aware of the "agreement to sell" between the plaintiff and the defendants in the suit. Publication of a notice in the Hindustan Times, Delhi Edition, and the legal notice which Living Media India Limited, appellant's sister concern, sent to the defendants indeed left no manner of doubt that the appellant was aware of a pre-existing agreement to sell between the plaintiff and the defendants. It is also beyond dispute that the sale of the suit property in favour of the appellant was in breach of a specific order of injunction passed by the trial Court. As a matter of fact, the sale deeds executed by the defendants falsely claimed that there was no impediment in their selling the property to the appellant even though such an impediment in the form of a restraint order did actually exist forbidding the defendants from alienating the suit property. The High Court was in that view justified in holding that the sale in favour of the appellant was a clandestine transaction which finding has been rightly affirmed in the order proposed by my Esteemed Brother, and if I may say so with great respect for good and valid reasons.

Para 48: The second aspect which the proposed judgment succinctly deals with is the effect of a sale pendete lite. The legal position in this regard is also fairly well settled. A transfer pendete lite is not illegal ipso jure but remains subservient to the pending litigation. In NagubaiAmmal&Ors.v. B. ShamaRao&Ors., AIR 1956 SC 593, this Court while interpreting Section 52 of the Transfer of Property Act observed:

"...The words "so as to affect the rights of any other party thereto under any decree or order which may be made therein ", make it clear that the transfer is good except to the extent that it might conflict with rights decreed under the decree or order. It is in this view that transfers pendente lite have been held to be valid and operative as between the parties thereto. "

Para 49: To the same effect is the decision of this Court in Vinod Seth v. Devinder Bajaj (2010) 8 SCC 1 : (2010 AIR SCW 4860) where this Court held that Section 52 does not render transfers affected during the pendency of the suit void but only render such transfers subservient to the rights as may be eventually determined by the Court. The following passage in this regard is apposite:

"42. It is well settled that the doctrine of lis pendens does not annul the conveyance by a party to the suit, but only renders it subservient to the rights of the other parties to the litigation. Section 52 will not therefore render a transaction relating to the suit property during the pendency of the suit void but render the transfer inoperative insofar as the other parties to the suit. Transfer of any right, title or interest in the suit property or the consequential acquisition of any right, title or interest, during the pendency of the suit will be subject to the decision in the suit."

50 The decision of this Court in A. Nawab John &Ors. v. V.N. Subramanyam (2012) 7 SCC 738 : (2012 AIR SCW 4248) is a recent reminder of the principle of law enunciated in the earlier decisions. This Court in that case summed up the legal position thus:

"18........The mere pendency of a suit does not prevent one of the parties from dealing with the property constituting the subject-matter of the suit. The section only postulates a condition that the alienation will in no manner affect the rights of the other party under any decree which may be passed in the suit unless the property was alienated with the permission of the court."

Para 51: We may finally refer to the decision of this Court in JayaramMudaliar v. Ayyaswami and Ors. (1972) 2 SCC 200 : (AIR 1973 SC 569) in which were extracted with approval observations made on the doctrine of lis pendens in "Commentaries of Laws of Scotland, by Bell". This Court said:

"43...........Bell, in his commentaries on the Laws of Scotland said that it was grounded on the maxim: "Pendente lite nibilinnovandum " He observed:

It is a general rule which seems to have been recognised in all regular systems of jurisprudence, that during the pendence of an action, of which the object is to vest the property or obtain the possession of real estate, a purchaser shall be held to take that estate as it stands in the person of the seller, and to be bound by the claims which shall ultimately be pronounced."

Para 52: There is, therefore, little room for any doubt that the transfer of the suit property pendente lite is not void ab initio and that the purchaser of any such property takes the bargain subject to the rights of the plaintiff in the pending suit. Although the above decisions do not deal with a fact situation where the sale deed is executed in breach of an injunction issued by a competent Court, we do not see any reason why the breach of any such injunction should render the transfer whether by way of an absolute sale or otherwise ineffective. The party committing the breach may doubtless incur the liability to be punished for the breach committed by it but the sale by itself may remain valid as between the parties to the transaction subject only to any directions which the competent Court may issue in the suit against the vendor.

Para 53: The third dimension which arises for consideration is about the right of a transferee pendente lite to seek addition as a party defendant to the suit under Order I, Rule 10, CPC. I have no hesitation in concurring with the view that no one other than parties to an agreement to sell is a necessary and proper party to a suit. The decisions of this Court have elaborated that aspect sufficiently making any further elucidation unnecessary. The High Court has understood and applied the legal propositions correctly while dismissing the application of the appellant under Order I, Rule 10, CPC. What must all the same be addressed is whether the prayer made by the appellant could be allowed under Order XXII, Rule 10 of the CPC, which is as under:

"Procedure in case of assignment before final order in suit. -

(1) In other cases of an assignment, creation or devolution of any interest during the pendency of a suit, the suit may, by leave of the court, be continued by or against the person to or upon whom such interest has come or devolved.

(2) The attachment of a decree pending an appeal therefrom shall be deemed to be an interest entitling the person who procured such attachment to the benefit of sub-rule (1)."

Para 54: A simple reading of the above provision would show that in cases of assignment, creation or devolution of any interest during the pendency of a suit, the suit may, by leave of the Court, be continued by or against the person to or upon whom such interest has come or devolved. What has troubled us is whether independent of Order I, Rule 10, CPC the prayer for addition made by the appellant could be considered in the light of the above provisions and, if so, whether the appellant could be added as a party-defendant to the suit. Our answer is in the affirmative. It is true that the application which the appellant made was only under Order I, Rule 10, CPC but the enabling provision of Order XXII, Rule 10, CPC could always be invoked if the fact situation so demanded. It was in any case not urged by counsel for the respondents that Order XXII, Rule 10 could not be called in aid with a view to justifying addition of the appellant as a party-defendant. Such being the position all that is required to be examined is whether a transferee pendente lite could in a suit for specific performance be added as a party defendant and, if so, on what terms.

Para 55: We are not on virgin ground insofar as that question is concerned. Decisions of this Court have dealt with similar situations and held that a transferee pendente lite can be added as a party to the suit lest the transferee suffered prejudice on account of the transferor losing interest in the litigation post transfer. In KhemchandShankerChoudhary v. Vishnu HariPatil (1983) 1 SCC 18 : (AIR 1983 SC124), this Court held that the position of a person on whom any interest has devolved on account of a transfer during the pendency of a suit or a proceeding is somewhat similar to the position of an heir or a legatee of a party who dies during the pendency of a suit or a proceeding. Any such heir, legatee or transferee cannot be turned away when she applies for being added as a party to the suit. The following passage in this regard is apposite:

"6... Section 52 of the Transfer of Property Act no doubt lays down that a transferee pendente lite of an interest in an immovable property which is the subject-matter of a suit from any of the parties to the suit will be bound insofar as that interest is concerned by the proceedings in the suit. Such a transferee is a representative in interest of the party from whom he has acquired that interest. Rule 10 of Order 22 of the Code of Civil Procedure clearly recognises the right of a transferee to be impleaded as a party to the proceedings and to be heard before any order is made. It may be that if he does not apply to be impleaded, he may suffer by default on account of any order passed in the proceedings. But if he applies to be impleaded as a party and to be heard, he has got to be so impleaded and heard. He can also prefer an appeal against an order made in the said proceedings but with the leave of the appellate court where he is not already brought on record. The position of a person on whom any interest has devolved on account of a transfer during the pendency of any suit or a proceeding is somewhat similar to the position of an heir or a legatee of a party who dies during the pendency of a suit or a proceeding, or an official receiver who takes over the assets of such a party on his insolvency. An heir or a legatee or an official receiver or a transferee can participate in the execution proceedings even though their names may not have been shown in the decree, preliminary or final. If they apply to the court to be impleaded as parties they cannot be turned out."(Emphasis supplied)

Para 56: To the same effect is the decision of this Court in Amit Kumar Shaw v. Farida Khatoon (2005) 11 SCC 403 : (AIR 2005 SC 2209) where this Court held that a transferor pendente lite may not even defend the title properly as he has no interest in the same or collude with the plaintiff in which case the interest of the purchaser pendente lite will be ignored, To avoid such situations the transferee pendente lite can be added as a party defendant to the case provided his interest is substantial and not just peripheral. This is particularly so where the transferee pendente lite acquires interest in the entire estate that forms the subject-matter of the dispute. This Court observed:

"16... The doctrine of lis pendens applies only where the lis is pending before a court. Further pending the suit, the transferee is not entitled as of right to be made a party to the suit, though the court has a discretion to make him a party. But the transferee pendente lite can be added as a proper party if his interest in the subject-matter of the suit is substantial and not just peripheral. A transferee pendente lite to the extent he has acquired interest from the Defendant is vitally interested in the litigation, where the transfer is of the entire interest of the Defendant: the latter having no more interest in the property may not properly defend the suit. He may collude with the Plaintiff. Hence, though the Plaintiff is under no obligation to make a Us pendens transferee a party, under Order 22, Rule 10 an alieneependente lite may be joined as party. As already noticed, the court has discretion in the matter which must be judicially exercised and an alienee would ordinarily be joined as a party to enable him to protect his interests. The Court has held that a transferee pendente lite of an interest in immovable property is a representative-in-interest of the party from whom he has acquired that interest. He is entitled to be impleaded in the suit or other proceedings where the transferee pendente lite is made a party to the litigation; he is entitled to be heard in the matter on the merits of the case. "

Para 57: To the same effect is the decision of this Court in RikhuDev, Chela BawaHarjugDass v. SomDass (deceased) through his Chela ShiamaDass, (1976) 1 SCC 103 : (AIR 1975 SC 2159).

Para 58: To sum up:

(1) The appellant is not a bona fide purchaser and is, therefore, not protected against specific performance of the contract between the plaintiffs and the owner defendants in the suit.

(2) The transfer in favour of the appellant pendente lite is effective in transferring title to the appellant but such title shall remain subservient to the rights of the plaintiff in the suit and subject to any direction which the Court may eventually pass therein.

(3) Since the appellant has purchased the entire estate that forms the subject-matter of the suit, the appellant is entitled to be added as a party defendant to the suit.

(4) The appellant shall as a result of his addition raise and pursue only such defenses as were available and taken by the original defendants and none other.

AIR 2005 SC 2209

Para 8: On a combined reading of Or. 1 R. 10, Or. XXII R. 10 of the Code of Civil Procedure and Sec. 52 of the Transfer of Property Act, can an application for substitution by a subsequent transferee be rejected and the subsequent purchaser be non-suited altogether is the prime question for consideration in these appeals.

Para 9: The object of Or. 1 R. 10 is to discourage contests on technical pleas, and to save honest and bona fide claimants from being non-suited. The power to strike out or add parties can be exercised by the Court at any stage of the proceedings. Under this Rule, a person may be added as a party to a suit in the following two cases:

(1) When he ought to have been joined as plaintiff or defendant, and is not joined so, or

(2) When, without his presence, the questions in the suit cannot be completely decided.

Para 10: The power of a Court to add a party to a proceeding can not depend solely on the question whether he has interest in the suit property. The question is whether the right of a person may be affected if he is not added as a party. Such right, however, will include necessarily an enforceable legal right.

Para 14: An alienee pendente lite is bound by the final decree that may be passed in the suit. Such an alienee can be brought on record both under this rule as also under Or. 1 R. 10. Since under the doctrine of lis pendens a decree passed in the suit during the pendency of which a transfer is made binds the transferee, his application to be brought on record should ordinarily be allowed.

Para 15: Section 52 of the Transfer of Property Act is an expression of the principle "pending a litigation nothing new should be introduced". It provides that pendente lite, neither party to the litigation, in which any right to immovable property is in question, can alienate or otherwise deal with such property so as to affect his appointment. This Section is based on equity and good conscience and is intended to protect the parties to litigation against alienations by their opponent during the pendency of the suit. In order to constitute a lis pendens, the following elements must be present:

(1) There must be a suit or proceeding pending in a Court of competent jurisdiction

(2) The suit or proceeding must not be collusive.

(3) The litigation must be one in which right to immovable property is directly and specifically in question.

(4) There must be a transfer of or otherwise dealing with the property in dispute by any party to the litigation.

(5) Such transfer must affect the rights of the other party that may ultimately accrue under the terms of the decree or order.

Para 16: The doctrine of lis pendens applies only where the lis is pending before a Court. Further pending the suit, the transferee is not entitled as of right to be made a party to the suit, though the Court has a discretion to make him a party. But the transferee pendente lite can be added as a proper party if his interest in the subject matter of the suit is substantial and not just peripheral. A transferee pendente lite to the extent he has acquired interest from the defendant is vitally interested in the litigation, whether the transfer is of the entire interest of the defendant; the latter having no more interest in the property may not properly defend the suit. He may collude with the plaintiff. Hence, though the plaintiff is under no obligation to make a lis pendens transferee a party; under Or. XXII R. 10 an alieneependente lite may be joined as party. As already noticed, the Court has discretion in the matter which must be judicially exercised and an alienee would ordinarily be joined as a party to enable him to protect his interests. The Court has held that a transferee pendente lite of an interest in immovable property is a representative-in-interest of the party from whom he has acquired that interest. He is entitled to be impleaded in the suit or other proceedings where the transferee pendente lite is made a party to the litigation; he is entitled to be heard in the matter on the merits of the case.

AIR 2007 SC 1332

Para 12: The principles specified in Section 52 of the T.P. Act are in accordance with equity, good conscience or justice because they rest upon an equitable and just foundation that it will be impossible to bring an action or suit to a successful termination if alienations are permitted to prevail. A transferee pendente lite is bound by the decree just as much as he was a party to the suit. The principle of lis pendens embodied in Section 52 of the T.P. Act being a principle of public policy, no question of good faith or bona fide arises. The principle underlying Section 52 is that a litigating party is exempted from taking notice of a title acquired during the pendency of the litigation. The mere pendency of a suit does not prevent one of the parties from dealing with the property constituting the subject matter of the suit. The Section only postulates a condition that the alienation will in no manner affect the rights of the other party under any decree which may be passed in the suit unless the property was alienated with the permission of the Court.

Sandeep Jalan

Advocate

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